The Carter administration has quietly joined private economic forecasters in predicting a mild recession for 1979 as a result of the president's dollar-rescue efforts late last month - with little or no abatement in the current inflation rate of 7 to 7 1/2 percent.
Officials still are insisting publicly that the economy will grow at a pace of "3 percent or so" in 1979, internal estimates they are working with informally show a decidedly more sluggish 1.8 percent pace that implies a mild recession.
At the same time, key planners concede the inflation rate is likely to be 7 percent or more next year, rather than the 6 to 6 1/2 percent Carter has set as a goal for his new anti-inflation program. The administration has been forecasting that the economy will meet its anti-inflation goals.
Top Carter economic officials have stuck doggedly to the more optimistic forecasts, essentially for political reasons. Admitting to the more realistic predictions would amount to conceding defeat before the wage-price program got off the ground - and would undermine domestic support for Carter's dollar-rescue plan.
But the economic chickens may come home to roost when the president submits his new budget to Congress next January. If Carter bases his new budget projections on the "official" more optimistic projections - and aides say he's almost certain to do so - he's likely to wind up far off the mark.
If the economy nosedives more steeply than the budget projects officially, the deficit will end up well above the president's goal of $30 billion or less. The dampened economic activity would reduce the amount of revenue the government takes in and would bloat spending for jobless benefits.
At the same time, a higher-than-projected inflation rate would boost spending for defense and social programs far beyond what the government has forecast, adding billions of dollars to total outlays for fiscal 1980. The changes could affect the current fiscal year as well.
What all this suggests, at least to some analysts, is that Carter may have a more difficult time than expected in bringing the economy back from recession before the start of the 1980 election campaign. Although the likelihood is the economy will be improving that spring, the jobless rate is likely to be high.
Although there's little doubt Congress would revive at least some anti-recession programs if the unemployment rate began rising sharply again, the persistently high inflation rate could dampen lawmakers' enthusiasm for more serious government pump-printing.
In the minds of some analysts, that may heighten the odds that the administration ultimately will go for mandatory wage-price controls. If Carter could do something to hold prices down suddenly - and dramatically - the economy might bounce back more quickly.
Administration officials keep insisting the president abbors mandatory controls and wouldn't consider them except in case of a national emergency. However, there's a good chance that controls might seem more attractive in the spring of an election year.
The prospect now seems that the recession will be a mild one. Otto Eckstein, the former Johnson administration economic adviser who now heads Data Resources Inc., has forecast a 2 percent year-over-year growth rate, with slight declines in the second and third quarters.
Other forecasts very somewhat in terms of magnitude, but most predict the same sort of mild and relatively brief recession. The 2 per cent year-over-year average translates into a growth rate of about half that amount between late 1978 and the end of 1979.
One reason economists expect the recession to be so mild and short is that, apart from the Carter-ordered rise in interest rates, the economy has none of the imbalances that traditionally have presaged deeper and morelengthy downturns.
The overall accumulation of business inventories, while likely to get out of whack when the growth rate declines later this year, is pretty well in line with sales levels now. (It was the inventory swings that intensified the 1974-75 recession.) And the cash position of business generally is good.
But the inflation outlook still is bearish. To begin with, the economy still must absorb a spate of sizable cost boosts early next year, from the Carter-sanctioned increases in Social Security taxes and the minimum wage to the possibility of a larger-than-expected jump in oil prices.
Then there's also the prospect of higher food and energy prices generally - with neither subject to the administration's new wage-price guidelines program. Forecasts now are that food and energy prices together will jump 12 percent in 1979.
Admittedly, the forecasters could be too pessimistic now, both on the extent of the recession and on Carter's ability to recover from the slump before he has to start campaigning. The economy may rebound more rapidly, allowing the president to ride into the campaign on a crest.
Carter also could be aided by easier money and credit policies late next year. Although the Federal Reserve Board ostensibly is independent of any sitting administration, for the past 15 years it consistently has increased the money supply during a presidential election year.
In any case, whichever forecast the administration adopts in January, it may prove difficult for officials to explain the move. Carter either must come clean and concede his goals are unlikely to be met, or gamble on the consequences for 1980 and beyond.
The odds right now are that he will gamble.